OPTIBASE LTD ILS0.65 HERZLIYA, Israel, Mar 30, 2017 /PRNewswire/ -- Optibase Ltd. (NASDAQ: OBAS) today announced financial results for the fourth quarter ended December 31, 2016.
Revenues from fixed income real estate totaled $4 million for the quarter ended December 31, 2016, compared to revenues of $4.1 million for the fourth quarter of 2015.
Net loss attributable to Optibase Ltd shareholders for the quarter ended December 31, 2016 was $1.6 million or $0.31 per basic and diluted share compared to net income of $114,000 or $0.02 per basic and diluted share for the fourth quarter of 2015.
For the year ended December 31, 2016, revenues totaled $16.3 million, compared with $15.3 million for the year ended December 31, 2015. Net income attributable to Optibase Ltd Shareholders for the year ended December 31, 2016 was $195,000 or $0.04 per basic and diluted share, compared to a net loss of $1.1 million or $0.21 per basic and diluted share for the for the year ended December 31, 2015.
Weighted average shares outstanding used in the calculation for the periods were approximately 5.1 million basic and diluted shares for each period.
As of December 31, 2016, we had cash and cash equivalents of $16 million, and shareholders' equity of $74.1 million, compared with $23.8 million, and $75.6 million, respectively, as of December 31, 2015.
Amir Philips, Chief Executive Officer of Optibase commented on the fourth quarter results: "This quarter and year to date results are in line with our operations over recent periods mostly in our fixed income real estate rent and operating income. We did see a substantial increase in our financial expenses, net and equity share in income (losses) of associates, net over those periods due to corporate bond and loans received during the third quarter of 2015, and our 300 River Holdings, LLC investment in December 2015. For the year ended December 31, 2016 we generated NOI of $13.2 million representing a 7% increase over the same period in 2015, and a stable Recurring FFO of $4.6. The increase in NOI is primarily due to the contribution of the supermarkets portfolio in Bavaria, Germany of which the purchase was completed during the second and third quarters of 2015 and to the decrease in the acquisition-related costs incurred in 2015 related to this acquisition. For the fourth quarter of 2016, our NOI stayed stable at $3.2 million and our Recurring FFO decreased to $698,000 compared to the fourth quarter of 2015. The decrease in Recurring FFO is primarily due to an increase in our equity share in losses of associates related to our investment in 300 River Holdings, LLC of which the purchase was completed in December, 2015." Mr. Philips concluded: "We will continue our work to maintain our basic parameters as we progress through 2017."
ACCOUNTING AND OTHER DISCLOSURES
Non-GAAP Net Operating Income, or NOI, is a non-GAAP financial measure. The most directly comparable GAAP financial measure is operating income, which, to calculate NOI, is adjusted to add back real estate depreciation, and amortization, general and administrative expenses and other operation expenses less gain on sale of operating properties. We use NOI internally as a performance measure and believe that NOI (when combined with the primary GAAP presentations) provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense item that are incurred at the property level.
We consider the NOI to be an appropriate supplemental non-GAAP measure to operating income because it assists management, and thereby investors, to understand the core property operations prior to depreciation and amortization expenses and general and administrative costs. In addition, because prospective buyers of real estate have different overhead structures, with varying marginal impact to overhead by acquiring real estate, we consider the NOI to be a useful measure for determining the value of a real estate asset or groups of assets.
The metric NOI should only be considered as supplemental to the metric operating income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. NOI should also not be used as a supplement to, or substitute for, cash flow from operating activities (computed in accordance with generally accepted accounting principles in the United States).
Non-GAAP Funds from operation, or FFO, is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income, which, to calculate FFO, is adjusted to add back depreciation and amortization and after adjustments for unconsolidated associates. We make certain adjustments to FFO, which it refers to as Non-GAAP recurring FFO or recurring FFO, to account for items we do not believe are representative of ongoing operating results, including transaction costs associated with acquisitions. We use FFO internally as a performance measure and we believe FFO (when combined with the primary GAAP presentations) is a useful, supplemental measure of our operating performance as it's a recognized metric used extensively by the real estate industry. We also believe that Recurring FFO is a useful, supplemental measure of our core operating performance. The company believes that financial analysts, investors and shareholders are better served by the presentation of operating results generated from its FFO and Recurring FFO measures.
We consider the FFO and Recurring FFO to be an appropriate supplemental non-GAAP measure to operating income because it assists management, and thereby investors, in analyzing our operating performance.
The metric's FFO and Recurring FFO should only be considered as supplemental to the metric net income as a measure of our performance. FFO (i) does not represent cash flow from operations as defined by GAAP, (ii) is not indicative of cash available to fund all cash flow needs, including the ability to make distributions, (iii) is not an alternative to cash flow as a measure of liquidity, and (iv) should not be considered as an alternative to net income (which is determined in accordance with GAAP) for purposes of evaluating our operating performance.
Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data
A reconciliation of operating income to NOI is as follows:
Year ended Three months ended
December 31 December 31 December 31 December 31
2016 2015 2016 2015
$ $ $ $
Audited Audited Unaudited Unaudited
------- ------- --------- ---------
GAAP Operating income 6,320 4,189 1,272 1,609
Adjustments:
Real estate depreciation and
amortization 4,244 3,925 1,045 1,093
General and administrative 2,615 1,849 870 429
Other operating costs - 2,352 - 35
Non-GAAP Net Operating Income NOI 13,179 12,315 3,187 3,166
A reconciliation of net income to FFO and Recurring FFO is as follows:
Year ended Three months ended
December 31 December 31 December 31 December 31
2016 2015 2016 2015
$ $ $ $
Audited Audited Unaudited Unaudited
------- ------- --------- ---------
GAAP Net income (loss)
attributable to Optibase LTD 195 (1,068) (1,572) 114
Adjustments :
Real estate depreciation and
amortization 4,244 3,925 1,045 1,093
Prorata share of real estate
depreciation and amortization from
unconsolidated associates 1,282 541 110 136
Non controlling interests share in the
above adjustments (1,142) (1,170) (281) (284)
Non-GAAP Fund From Operation (FFO)) 4,579 2,228 (698) 1,059
Other operating costs - 2,352 - 35
Non-GAAP Recurring Fund From Operation
(Recurring FFO) 4,579 4,580 (698) 1,094
Amounts in thousands
About Optibase
Optibase invests in the fixed-income real estate field and currently holds properties and beneficial interest in real-estate assets and projects in Switzerland, Germany and in Texas, Philadelphia, PA and Miami, FL, Chicago, IL, USA and is currently looking for additional real estate investment opportunities. Optibase was previously engaged in the field of digital video technologies until the sale of its video solutions business to Optibase Technologies Ltd., a wholly owned subsidiary of VITEC Multimedia in July 2010. For further information, please visit www.optibase-holdings.com.
This press release contains forward-looking statements concerning our marketing and operations plans. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. All forward-looking statements in this press release are made based on management's current expectations which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. These statements involve a number of risks and uncertainties including, but not limited to, difficulties in finding suitable real-estate properties for investment, availability of financing for the acquisition of real-estate, difficulties in leasing of real-estate properties, insolvency of tenants, difficulties in the disposition of real-estate projects, risk relating to collaborative arrangements with our partners relating to our real-estate properties, risks relating to the full consummation of the transaction for the sale of our video solutions business, general economic conditions and other risk factors. For a more detailed discussion of these and other risks that may cause actual results to differ from the forward looking statements in this press release, please refer to Optibase's most recent annual report on Form 20-F. The Company does not undertake any obligation to update forward-looking statements made herein.
Optibase Ltd.
Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2016
Year ended Three months ended
December 31 December 31 December 31 December 31
2016 2015 2016 2015
$ $ $ $
Audited Audited Unaudited Unaudited
------- ------- --------- ---------
Fixed income real estate rent 16,338 15,273 4,014 4,087
Cost and expenses:
Cost of real estate operation 3,159 2,958 827 921
Real estate depreciation and amortization 4,244 3,925 1,045 1,093
General and administrative 2,615 1,849 870 429
Other operating costs - 2,352 - 35
Total cost and expenses 10,018 11,084 2,742 2,478
Operating income 6,320 4,189 1,272 1,609
Other Income 1,116 429 145 95
Financial expenses, net (3,366) (1,807) (1,028) (732)
Income before taxes on income 4,070 2,811 389 972
Taxes on income (1,627) (1,609) (409) (381)
Equity share in income (losses) of associates, net (323) (31) (1,206) 28
Net income 2,120 1,171 (1,226) 619
Net income attributable to non-controlling interests 1,925 2,239 346 505
Net income (loss) attributable to Optibase LTD 195 (1,068) (1,572) 114
Net income (loss) per share :
Basic and Diluted $0.04 ($0.21) ($0.31) $0.02
Number of shares used in computing earnings losses per share
Basic 5,147 5,133 5,144 5,133
Diluted 5,157 5,133 5,154 5,142
Amounts in thousands
Condensed Consolidated Balance Sheets
December 31, December 31,
2016 2015
Audited Audited
------- -------
Assets
------
Current Assets:
Cash and cash equivalents 16,024 23,806
Trade receivables 220 177
Other accounts receivables and prepaid expenses 528 318
Total current assets 16,772 24,301
Long term investments:
Other long term deposits and receivables 2,785 2,670
Investments in companies and associates 22,892 20,663
Total Long term investments 25,677 23,333
Property and other assets, net:
Real estate properties, net 207,690 214,840
Other assets, net 245 470
Total property and other assets 207,935 215,310
Total assets 250,384 262,944
Liabilities and shareholders' equity
------------------------------------
Current Liabilities:
Current maturities of long term loans and
bonds 10,360 8,535
Accounts payable and accrued expenses 4,254 3,297
Total liabilities attributed
to discontinued operations 2,061 2,109
Total current liabilities 16,675 13,941
Long term liabilities:
Deferred tax liabilities 13,620 14,178
Land lease liability, net 6,133 6,412
Other long-term liabilities 407 264
Long term loans, net of
current maturities 129,261 140,082
Long term bonds, net of
current maturities 10,160 12,483
Total long term liabilities 159,581 173,419
Shareholders' equity:
Shareholders' equity of
Optibase Ltd 55,134 55,784
Non-controlling interests 18,994 19,800
Total shareholders' equity 74,128 75,584
Total liabilities and shareholders' equity 250,384 262,944
Amounts in thousands
Media Contacts:
Amir Philips, CEO, Optibase Ltd.
011-972-73-7073-700
info@optibase-holdings.com
Investor Relations Contact:
Marybeth Csaby, for Optibase
+1-917-664-3055
Marybeth.Csaby@gmail.com
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SOURCE Optibase Ltd.
